On the way to true consumer centricity

Category management evolves further and places consumers and shoppers at the center of best practices.

Category management has evolved from a process for tactical planning and organization to a more holistic approach that includes shopper insights and shopper marketing.

CPG manufacturers and retailers that cohesively integrate these three disciplines are in better positions to become category leaders, suggests Kantar Retail in its 2011 Category Leadership Benchmarking Study.

Gradual shifts over about 15 years have placed consumers and shoppers at the center of category management best practices today. The Lempert Report believes this ability separates category leaders from their competitors, and helps earn them a better seat at the strategic table with retailers.

Not surprisingly, 81% of manufacturers surveyed regard category management as very/extremely important in the latest findings. This figure is down from 84% in 2006 and up from 70% in 2000.

For manufacturers, the top two category management activities that will differentiate them in the future are consumer/shopper insights (88%) and ability to listen (81%). For retailers, the top two are execution capability (73%) and ability to listen (71%), the findings show.

When manufacturers were asked which retailers rank among the top three in category management, Kroger (58.8%), Walmart (47.5%) and Target (44.2%) came out on top. Safeway was mentioned fourth most often (22.6%), but this was down 9.8 percentage points from its rank in the 2009 survey.

When retailers were asked which manufacturers ranked among the top three in consumer/shopper insights and category management, Procter & Gamble (41.9%), Kraft Foods (37.1%) and PepsiCo (27.0%) came out on top, with General Mills a hair width behind (26.9%).

The Lempert Report suggests that CPG and retailers collaborate more closely to mine data-driven insights and tailor solutions for targeted consumers. We feel this is the optimal way for brands and stores to differentiate and become more relevant to buyers.